Ceylon Finance Today: Central Bank of Sri Lanka (CBSL) plans to raise Rs 10,000 million by selling Treasury (T) Bonds to the market at a primary auction to be held on Friday (5 February).
Those comprise 2020 maturities of Rs 2,000 million in value; Rs 3,000 million worth of 2030 maturities and Rs 5,000 million worth of 2041 maturities respectively.
This will be the third consecutive T Bond auction where CBSL on behalf of the Government of Sri Lanka (GoSL) will be offering 2020 maturities, after rejecting offers made for this tenure in the immediately two preceding auctions held, which, incidentally, were the first two T Bond auctions held for the current year, discounting Friday's to be T Bond auction.
The probable reason for CBSL's rejection of offers made for the 2020 maturity may have had been due to CBSL feeling that the market was asking for higher yields. The last time CBSL sold the 2020 maturity was at an auction held on 23 December, 2015. At that auction, this maturity fetched a WAY of 9.79%, 23 basis points (bps) more than the WAY fetched the last time it was purchased, which was on 18 December, 2015.
Meanwhile, the other two maturities on offer at Friday's auction, namely the 2030 and 2041 tenures, were last sold in the primary market in auctions held on 28.1.16. and 8.1.16. respectively, incidentally those being the two T Bond auctions held thus far for the year (other than the to be held T Bond auction of Friday's).In the 28 January, 2016 auction, the 2030 maturity fetched a WAY of 11.53%, seven bps more than the WAY fetched for this same tenure at the 8 January, 2016 auction. Similarly, the 2041 tenure was last sold at an auction held on 8 January, 2016. In that auction, this tenure fetched a WAY of 12.09%. The 2041 maturity was not offered to the market last year.
This will be the third consecutive T Bond auction where CBSL on behalf of the Government of Sri Lanka (GoSL) will be offering 2020 maturities, after rejecting offers made for this tenure in the immediately two preceding auctions held, which, incidentally, were the first two T Bond auctions held for the current year, discounting Friday's to be T Bond auction.
The probable reason for CBSL's rejection of offers made for the 2020 maturity may have had been due to CBSL feeling that the market was asking for higher yields. The last time CBSL sold the 2020 maturity was at an auction held on 23 December, 2015. At that auction, this maturity fetched a WAY of 9.79%, 23 basis points (bps) more than the WAY fetched the last time it was purchased, which was on 18 December, 2015.
Meanwhile, the other two maturities on offer at Friday's auction, namely the 2030 and 2041 tenures, were last sold in the primary market in auctions held on 28.1.16. and 8.1.16. respectively, incidentally those being the two T Bond auctions held thus far for the year (other than the to be held T Bond auction of Friday's).In the 28 January, 2016 auction, the 2030 maturity fetched a WAY of 11.53%, seven bps more than the WAY fetched for this same tenure at the 8 January, 2016 auction. Similarly, the 2041 tenure was last sold at an auction held on 8 January, 2016. In that auction, this tenure fetched a WAY of 12.09%. The 2041 maturity was not offered to the market last year.
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